Mr. Young made a motion to amend the agenda so that report items
listed as "other" (i.e., Interinstitutional Faculty Senate [IFS] and the Oregon Student Association [OSA])
be included underneath the Chancellor's Report portion of the meeting.

Mr. Williams asked about the intent of the permanency of the
motion. Saying that he assumed the move would be permanent, Mr. Young conceded that he would be willing to take
it up again at a future meeting. Noting that the IFS report was typically included in the Chancellor's Report portion
of the meeting, Mr. Willis asked why it had been moved. While agreeing to the idea of adding the OSA report at
each meeting, Chancellor Cox explained that he was somewhat concerned about the constraints that two regular reports
would have on his time. "This is my time with you every two months and there is only so much of that because
we need to get into the meeting," he pointed out. The Chancellor went on to say that he would be more than
willing to include both reports in his report portion of the meeting if the Board agreed to allow his full reporting
time as well.

Mr. Williams asked if it might be more appropriate to have the
Chancellor follow the IFS and OSA reports, so he could speak just prior to the Board's action items. Mr. Young
said he would accept that as a friendly amendment. Indicating that he felt the meeting agenda deserved greater
attention by the Board, Mr. Imeson asked if the motion might reflect a one-time situation to allow for further
discussion. Mr. Young agreed to Mr. Imeson's suggested amendment.

As read by Dr. Vines, the revised motion was as follows: Mr.
Young moved to place the IFS and OSA reports above the Chancellor's report, away from the "other reports"
section of the meeting agenda. The Board then unanimously agreed by consensus to the reordering of the meeting
agenda for this meeting only, and to consider the placement of the two reports for future agendas.

IFS/OSA REPORTS

Below is an excerpt of IFS President Wollner's comments:

"Let me begin by conveying to you our thanks for your work
over the last academic year and during the legislative session for the System, the institutions, the students,
the faculty and staff, and for the people of Oregon, the ultimate beneficiaries of an excellent system of public
higher education.

"I am concerned that, as successful as we were in the 2001
legislature, we are accepting a very real decline in public support for higher education, and we are devaluing
the role of what we might call public enterprise in our society and economy. Yet the development of the public
dimension in our national life and in the life of the state is one of the great stories in the evolution of American
democracy.

"We do a grave disservice to public education when we allow
the compensation of our faculty to fall below acceptable levels which, it appears, will be the case when the new
PEBB benefits package is announced in the late fall. We cannot have a strong system if we don't solve this problem
because we will never be able to attract good young people who can command more reasonable salaries elsewhere.

"We have all fought valiantly to hold the line against this
rising tide of indifference among our citizenry and our political leaders to the public sector over this decade.
But if the predictions about the poverty of the 2003 legislature hold true, we will be fighting the most intense
battle ever on behalf of the System."

Below is an excerpt of OSA President Mary Cunningham's comments:

"I would like to first thank the Board and the Chancellor's
Office for creating this opportunity for students to sit alongside the IFS and report what issues are of concern
to students and their elected leaders. I would further like to thank Director Young for bringing this to the attention
of the Board.

"I would also like to quickly recognize the productive and
cooperative relationship between Oregon students, staff, faculty, and the University System. This relationship
helped move legislators to restore many of the cuts to the University System. While we greatly appreciate many
of the funds restored by the legislature, the restorations address very specific needs such as the new campus in
Bend or a School of Veterinary Medicine. What was not as well addressed was the core mission of the System, the
instruction of students.

"When the final OUS budget passed the Ways and Means Subcommittee
on Education, many of the members spoke strongly about their concerns about the rising costs. Some even voted against
this budget on that basis. But many more would be quite concerned to know that the four and three percent increases
they recommended might be only about half of the total cost increase for students.

"We're particularly concerned about new energy surcharge
fees that reach up to $40 per term. At two universities', the total recommended increases are more than double
the four percent cost increase foreseen by the legislature. We urge the Board to stay within the increases set
by the legislature to keep faith with legislators and with students."

Dr. Aschkenasy wished to publicly thank the state's citizens
for the $812 million budget the System was awarded.

APPROVAL OF MINUTES

The Board dispensed with the reading of the June 8, 2001, regular
meeting minutes. Mr. Lussier moved and Mr. Young seconded the motion to approve the minutes as submitted. The following
voted in favor: Directors Aschkenasy, Hempel, Imeson, Lehmann, Lussier, Richmond, Williams, Willis, Wustenberg,
Young, and VanLuvanee. Those voting no: none

PRESIDENT'S REPORT

Chancellor Cox's Retirement Announcement

Saying that Chancellor Cox's recent announcement of his intent
to retire by 2002 was the "most significant news of the day," President VanLuvanee indicated that the
Chancellor agreed to remain in his position until a replacement is named.

Continuing, Mr. VanLuvanee stated, "Joe's leadership over
the past 16 years, both as president and Chancellor, are unprecedented. He's led us in a different direction against
a lot of competing forces. Further, he has navigated us through some very tumultuous times in the legislature.
It's largely because of him, and the bridges he has built with lawmakers, faculty, students, and the public that
OUS has evolved into a highly regarded and much strengthened cog within the wheel of state government. As the architect
of change for the System, Joe will be leaving us with the distinction, I believe, of being one of the strongest
systems in the country."

2001-2003 Biennial Budget

President VanLuvanee discussed the Joint Budget and Finance/System
Strategic Planning Committee meeting that convened prior to the Board meeting. At that meeting, several reports
were presented by staff on the allocations awarded by the legislature. "I think that about eight months ago
when the Governor spoke to us via videoconference at the CAPITAL Center, we hardly would have thought such a positive
outcome of the legislative session could be realized," pointed out Mr. VanLuvanee. "I think that the
work of many during this recent session has yielded the results, but I give the Chancellor credit for being in
the forefront," he continued.

Further extending his thanks to others involved in the legislative
process, Mr. VanLuvanee specifically named OUS Director of Government Affairs Grattan Kerans, the vice chancellors,
and campus presidents. "Your efforts will benefit students and all Oregonians for years to come," he
said.

Shawn Hempel

Recognizing Mr. Hempel for completing his two years of service
on the Board as a student member, Mr. VanLuvanee presented him with a gift from Board members. "Shawn has
been an excellent addition to the Board and we're sorry to see him go," said Mr. VanLuvanee

Mr. Hempel said that his experience was very positive. "Giving
students the opportunity to be a part of the process that decides the future for students is something this state
can be proud of," he observed.

Staff Transitions

Mr. VanLuvanee announced that Lynda Swanson, OUS director of
capital construction planning, recently accepted a position with the Port of San Francisco. He expressed his appreciation
for her work over the past several years. He also expressed his thanks to Associate Board Secretary Lynda Rose,
who is also leaving OUS after several years of service. Finally, he thanked Dr. Hopkins-Powell for her work as
interim president at SOU.

Chancellor Recognized for Service

Pointing out a recent significant accomplishment by Chancellor
Cox, Mr. VanLuvanee shared that he recently was honored by the Portland Metropolitan Chamber of Commerce with the
Portland Chamber Chair's Award for Public Service. "I think it speaks volumes about how much the metropolitan
community and the entire state values Dr. Cox's leadership and personal commitment to our university system,"
Mr. VanLuvanee observed.

Notable Campus Achievements

Describing PSU's work the past several years in creating strong
ties with both North and South Korea, Mr. VanLuvanee expressed his satisfaction at the recent news that the institution
has become the first in the free world to begin teaching in that country. Faculty, he said, will begin in fall
2001, instructing North Korean trade officials and enterprise managers on the process of international trade and
international trade transactions. Negotiations, which began in 1999, were initiated by President Bernstine and
Professor Earl Molander, from the PSU Free Market Business Development Institute.

As one of only ten universities nationwide selected to participate
in a demonstration project for distance education, EOU, said Mr. VanLuvanee, will test new ways of helping students
finance their studies through this means. The hope, he added, is to develop new models, remove barriers, and make
it easier for students to receive needed financial assistance. "That's a high compliment to the distance education
program at Eastern," said Mr. VanLuvanee, adding his congratulations to President Creighton and his staff.

New Student Nominee

Concluding his report, Mr. VanLuvanee pointed out in the audience
Erin Watari, who was recently nominated by Governor Kitzhaber to replace Mr. Hempel. Ms. Watari attends SOU and
is former student body vice president.

CHANCELLOR'S REPORT

Retirement Plans

Referencing his recent retirement announcement, Chancellor Cox
said that it was a difficult decision, but felt the time was right. He said that he plans to do consulting work,
as well as perhaps some teaching and writing following his retirement from OUS. The Chancellor noted that he also
plans to spend a lot of time sailing. "There are a lot of waters that I haven't put a rudder in yet,"
he shared.

Faculty Salaries and Benefits

Chancellor Cox explained to the Board that much activity is taking
place relating to faculty salaries and benefits. As an example, the Chancellor described how UO faculty and administrative
leadership carved out a plan to enhance salaries by reallocating monies from areas other than the General Fund.
The Chancellor commended President Frohnmayer and Provost Moseley for their efforts to make faculty salaries competitive.
All other campuses, he said, are looking at the same kinds of shifts in order to attract and retain talented individuals.

HB 2015

Noting the recent conversations about HB 2015, Chancellor Cox
summarized the intent of the legislation. First, it creates a commission during the interim between the 2001 and
2003 sessions that is charged with creating and making recommendations to the Governor concerning the postsecondary
educational budget framework for developing future budgets. In addition, the commission will examine the questions
of autonomy and governance for OUS institutions and recommend what it sees as the best way to accomplish the kind
of delivery model that best meets the needs of the state. Saying that he hoped people would view this situation
as an opportunity, the Chancellor hoped to achieve greater autonomy for the seven universities in budget preparation,
planning, and development. He added that it could also be a chance to create a stronger coalition of higher education
entities.

Mr. Kerans, agreeing that the legislation should be viewed as
an opportunity, said that the commission will act as a sounding board for consideration of new ideas. "It
will be a good time for virtually anyone to come to the table and examine the contributions of both public and
private postsecondary education in Oregon," Mr. Kerans observed.

As a final thought, the Chancellor wanted to be clear that the
legislation did not mandate what was being referred to early on as a "superboard," but that it was a
commission with a finite assignment ending in June 2003.

Echoing both the Chancellor's and Mr. Kerans' assessments of
the intent of HB 2015, Mr. VanLuvanee said he felt the genesis of the legislation emerged from the work accomplished
by the Board and campuses in recent years. "It's really learning about being an empowered organization,"
he concluded.

[July 21, 2000], is hereby amended by reference as a permanent
rule. All prior adoptions of academic year fee documents are hereby repealed except as to rights and obligations
previously acquired or incurred thereunder.

Through the amendment, the Board adopted the document entitled
Academic Year Fee Book, memos of attachment amending the draft document, and other amendments and attached schedules
noted.

Budget and Finance Recommendation to the Board

Mr. Imeson, chair of the Budget and Finance Committee, reported
that the Committee unanimously recommended Board approval of the Fee Book. (Copies of the 2001-02 Academic Year
Fee Book are on file in the Board's office.)

Board Discussion and Action

Summarizing the major amendments to the Fee Book, Mr. Imeson
pointed out in particular the tuition increases, which were identified at between three (2002-03) and four (2001-02)
percent for undergraduate residents, with some exceptions for graduate and nonresident students.

In addition to incidental fee charges, Mr. Imeson pointed out
an energy surcharge that several institutions proposed as a way to help defray unprecedented price increases. Indicating
those charges were temporary, Mr. Imeson said they would be examined on an annual basis to determine need for continuation.
Concluding his remarks, Mr. Imeson said the Committee felt the requested increases reflected a responsible approach
in relation to the overall funding situation.

Mr. Imeson moved and Dr. Richmond seconded the motion to approve
the proposed amendments to OAR 580-040-0040, Academic Year Fee Book as submitted. On roll call vote, the following
voted in favor: Directors Aschkenasy, Hempel, Imeson, Lehmann, Lussier, Richmond, Williams, Willis, Wustenberg,
Young, and VanLuvanee. Those voting no: none.

Following the vote, Mr. Young observed that the increases will
be a challenge for many students. But, given the situation, he conceded that the Board did a good job of holding
costs down as much as possible.

INTEGRATED SERVICES BUILDING,
EOU

Staff Recommendation to the Budget and Finance Committee

Staff recommended that the Board approve Eastern Oregon University's
request for authorization to seek approval from the State Emergency Board for a $4,300,000 of Article XI-F(1) bond
expenditure limitation to construct a 32,013 gross-square-feet (gsf) one-story building within its campus boundaries,
in order to provide space for EOU and for the State of Oregon Department of Human Resources.

Budget and Finance Recommendation to the Board

Mr. Imeson reported that the Budget and Finance Committee unanimously
approved the request as submitted, and recommended full Board approval.

Board Discussion and Action

After highlighting the space allocations between EOU and the
Department of Human Resources, Mr. Imeson said, "I think the Committee felt very positively about the partnership
approach that Eastern has undertaken with this multi-use building."

Referring back to the Academic Year Fee Book and impending tuition
increases, Ms. Wustenberg noted that in several other states, tuition rates are increasing even more exponentially.
In particular, she said that students in Minnesota were faced with a 12-14 percent increase. Along with those increases
came a termination of tuition remission for out-of-state athletes. She asked what percentage of students in OUS
were on some kind of tuition remission. Vice Chancellor Anderes said that it was 10,900 students. Chancellor Cox
clarified that the number included scholarship programs and special grants for all eligible students, not just
athletes. He added that the legislature has requested more specific information on tuition remissions in the next
session.

RESOLUTION REGARDING CLASSIFIED
INFORMATION FOR THE U.S. DEPARTMENT OF DEFENSE, PSU

Staff Recommendation to the System Strategic Planning Committee

Staff recommended the Board adopt the resolution regarding access
to classified information related to the Department of Defense material (refer to the System Strategic Planning
Committee docket dated July 20, 2001, for full language of the resolution).

System Strategic Planning Committee Discussion and Action

Before discussing the Committee's action on the item, Chair Lehmann
said that the Committee determined at its meeting to develop its future agendas in such a way so they correlate
more closely with issues being examined by the full Board. Saying that the Committee was impressed with the calendar
created by staff working with the Budget and Finance Committee, Chair Lehmann indicated that the System Strategic
Planning Committee will be developing a similar calendar of events and hopes to finalize it by the October Board
meeting. She invited suggestions from all Board members, as well as presidents, for items that might be included
in the calendar.

Chair Lehmann then turned to the consent item. She reported that
the Committee unanimously approved the resolution and it was referred to the Board for a final vote on its consent
agenda.

Board Discussion and Action

Ms. Lehmann moved and Mr. Young seconded the motion to approve
the item as submitted. The following voted in favor: Directors Aschkenasy, Hempel, Imeson, Lehmann, Lussier, Richmond,
Williams, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

Staff recommended that OIT be authorized to accept the transfer
of the bachelor's degree program in Clinical Laboratory Science and the undergraduate certificate program in Paramedic
Education from OHSU, effective September 2001, contingent upon Chancellor's Office review and approval of the terms
set forth in a memorandum of agreement between Oregon Health and Science University and Oregon Institute of Technology.

System Strategic Planning Committee Discussion and Action

Chair Lehmann reported that the Committee unanimously approved
the proposal as submitted and referred it to the Board for final action on its consent agenda.

Board Discussion and Action

Ms. Lehmann moved and Mr. Young seconded the motion to approve
the item as submitted. The following voted in favor: Directors Aschkenasy, Hempel, Imeson, Lehmann, Lussier, Richmond,
Williams, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

Mr. Williams asked about the reasons behind the transfer. OHSU
Provost Hallick explained that the partnership came about with OIT because OHSU is focusing its educational mission
on graduate professional education. Conversely, she said, OIT's mission includes undergraduate allied health.

Currently at OHSU, said Mr. Imeson, work is focused on the outcomes
of the legislative session. There was a very positive response by lawmakers to the Oregon Opportunity, the initiative
that aims to accelerate and expand OHSU's biomedical research activity. However, there were some reductions in
the basic state support to OHSU, concluded Mr. Imeson.

Mr. Lussier asked if it might be possible to arrange for a presentation
to the Board further describing the Oregon Opportunity. Mr. Imeson agreed that would be a good idea. President
VanLuvanee asked the Chancellor and the Board Secretary to schedule a presentation at an upcoming Board meeting.

Mr. Imeson reminded Board members that the legislature voted
to officially change the name of OHSU to Oregon Health and Science University. He added that the merger with the
Oregon Graduate Institute was proceeding as planned, which was the impetus for the name change.

PUBLIC INPUT SESSION

The following people spoke during the public input session:

Justin Geddes-Oregon State University

Mr. Geddes, president of the Associated Students of OSU, distributed
a letter written by Senator Cliff Trow, who expressed concern over the energy surcharge included in the Academic
Year Fee Book.

Outlining five specific concerns voiced by students regarding
the surcharge, Mr. Geddes listed the following:

feelings that implementing the charge circumvented the legislative
process;

concern that there was a lack of student participation in the
process;

concern about OSU's reaction to the situation, given its intellectual
and technical resources;

belief that the surcharge is an added burden for students that
comes along with tuition increases; and

concerns regarding accessibility.

Melissa White-United States Student Association

Ms. White, representing the United States Student Association,
indicated for the record that she was vice president of the Associated Students of OSU. Like Mr. Geddes, she also
expressed concern over the energy surcharge, given increases in tuition and fees. She urged greater efforts toward
creative conservation on campuses to contain costs versus implementing a surcharge.

ITEMS FROM BOARD MEMBERS

Ms. Lehmann said that she felt the Board Self-Study Workshop
conducted the day before was extremely valuable. She hoped that some of the ideas discussed will ultimately help
the Board improve its overall performance.

Updating the Board on the Oregon College Savings Plan, Ms. Lehmann
said that implementation is proceeding well and enrollment in the plan continues to increase.

Mr. Willis thanked his colleagues for their friendship the past
several years. While uncertain if his replacement would be appointed by the next meeting, Mr. Willis said he would
particularly miss the people involved in the System with whom he has worked the past eight years.

Dr. Richmond expressed her gratitude to all retiring Board members,
particularly Dr. Aschkenasy, who acted as her mentor. She also commented that she was saddened that a tuition increase
became necessary.

Dr. Aschkenasy thanked everyone for the years of friendship.

Mr. Hempel said that he appreciated the help that Board's office
staff provided him during his two years of service. He also thanked President Dow and other administrators at OIT
for their support.

Echoing other's comments, Mr. Williams thanked Dr. Aschkenasy,
Mr. Hempel, and Mr. Willis for their work on the Board.

After expressing his appreciation to retiring Board members,
Mr. Imeson thanked President Risser for inviting several Board members to attend a recent OSU Advisory Board meeting.
Saying that he felt the discussions were of the highest caliber, Mr. Imeson noted that the group is truly invested
in the business of OSU.

Ms. Wustenberg wished Dr. Aschkenasy, Mr. Hempel, and Mr. Willis
well and thanked them for their friendship and counsel. She said that she hoped people would begin considering
more positively the strides made at the legislative session on behalf of OUS and not dwell on the negative.

Mr. Lussier extended his best wishes to all retiring Board members.
He also thanked Lynda Rose for her work as associate Board secretary. He noted that they worked together for more
than ten years in various capacities, beginning at the UO Alumni Association.

Continuing his comments, Mr. Lussier pointed out that both the
Central Oregon branch campus and the engineering initiative came to fruition at the legislature. "I know that
Oregon State will do an excellent job building and developing the Cascades branch," he said. Mr. Lussier also
thanked the Chancellor for his leadership in moving citizens toward consensus about how to move ahead in Central
Oregon.

ITEMS FROM PRESIDENTS

President Youngblood extended her gratitude to all retiring Board
members. She especially thanked Mr. Willis for attending and speaking at the WOU commencement. "It reminds
me of the many other responsibilities that Board members take on," she observed.

Dr. Hopkins-Powell thanked everyone for their support during
her tenure as interim president at SOU.

PSU Provost Tetreault, speaking on behalf of President Bernstine,
congratulated all retiring Board members for a job well done.

EOU Provost Shepard, speaking on behalf of President Creighton,
indicated that Eastern benefitted from the work and dedication of retiring Board members Aschkenasy, Hempel, and
Willis. He made special note of the new science building at Eastern.

Dr. Hallick expressed her appreciation for OHSU's ongoing participation
in OUS Board meetings. She wished retiring Board members well in their future endeavors.

President Risser noted that all three retiring Board members
offered interesting and helpful perspectives. Noting the Chancellor's upcoming retirement, President Risser said
that he had been a "terrific leader."

President Dow extended her thanks to Dr. Aschkenasy, Mr. Hempel,
and Mr. Willis. As a student at OIT, Dr. Dow said she was proud of Mr. Hempel for balancing the rigors of his academic
schedule along with the work of being a Board member.

DELEGATION OF AUTHORITY TO BOARD'S
EXECUTIVE COMMITTEE

Board Secretary Vines read the statement pertaining to delegation
of authority to the Board's Executive Committee:

"Pursuant to Article II, Section 5 of the Bylaws of the
Board of Higher Education, the Board delegates to the Executive Committee authority to take final action as here
designated or deemed by the Committee to be necessary, subsequent to the adjournment of this meeting and prior
to the Board's next meeting, which is scheduled for October 19, 2001. The Executive Committee shall act for the
Board in minor matters, and any matter where a timely response is required prior to the next Board meeting."